Weekly closing line chart shows a triangle/wolfe wave pattern with wave 5 completed (confluence with Hammer). Expecting major declines into May 2015 (coincides with UK elections and effect looks similar to the drop before the Scottish referendum last year).

GBPLFX Weekly Analysis – 05/01/2015

Conclusion: Stay short on GBP against stronger currencies

LFXJPY

4 weeks ago, price formed a bearish engulfing at the top, but followed up with a sharp pin bar rejection candlestick and then a bullish closing candle.

Last week’s candlestick then formed a bearish engulfing again, indicating a move to the downside.

Next support is at 60.68 – 60 levels. Sharp declines expected?

Daily charts show break down from a medium term trend line. So expecting a decline to next support at 61.167 and then a rally to retest the break out level at 62.77 and then a decline.

Alternatively, since price bounced off the trend line but made a lower high, we could expect to see a straight down sell off.

LFXJPY Weekly Analysis – 05/01/2015

Conclusion: Stay long on JPY but close ahead of Wednesday’s ADP jobs report and other US data which could turn JPY bearish again.

NZDLFX

Monthly chart paints a very bearish picture with price still in the larger triangle pattern. A monthly break out from this could spell disaster for the Kiwi in the long term.

Weekly candlestick forms what looks like a shooting start but can be confirmed only if this week closes bearish.

Ideal Currency Pairs to trade this week

AUDCAD: Long positions recommended based on short term Aussie strength and Canadian weakness. But close before Friday’s Canadian payrolls data would be a safe bet. Also make note of Wednesday’s Canada trade balance and Ivey PMI data releases. Optionally, move trade to break even ahead of Wednesday’s data.

GBPJPY: Short positions recommended based on respective currencies strengths and weaknesses. GBPJPY formed a weekly bearish engulfing despite the long legged doji formation two weeks ago. Daily chart shows a break out to the downside after Thursday’s bullish inside bar. Short, targeting 183.29 support

AUDCHF: Long positions based on a piercing line pattern formation two weeks ago. Expect a minor dip in AUDCHF based on short term CHF strength. Look to buy from 0.8028, targeting 0.81 and 0.82 for the week.

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